MV ‘TARIK III’ Credit Europe Bank N.V. v The Fund Comprising the Proceeds of the Sale of the MV Tarik III and Others

The case concerned competing claims by various creditors against a fund constituted from the judicial sale of the motor vessel MV Tarik III. The vessel was owned by Garanti Finansal Kiralama A.S. and was subject to a bareboat (demise) charter to Caliskan Ic Ve Dis Ticaret Sanayi A.S. Credit Europe Bank N.V. arrested the vessel in rem and under s 5(3)(a) of the Admiralty Jurisdiction Regulation Act 105 of 1983, relying on the deeming provision in s 1(3), which treats a demise charterer as owner for purposes of an action in rem. After the vessel was sold, a fund was created and numerous creditors lodged claims. A referee recommended that most supplier claims be paid on the basis that the bareboat charter was still in force at the time of sale. Credit Europe Bank challenged this, contending that the charter had been terminated and that suppliers who had not arrested the vessel were not entitled to claim against the fund.

The appeal was dismissed with costs, including the costs of two counsel.

The judgment clarifies important principles in South African admiralty law concerning claims against a fund created by judicial sale of a vessel. It confirms that non-arresting creditors may share in such a fund if their claims are otherwise valid, and that termination of a charter must be clearly proved by the party asserting it. The case reinforces the operation of the deeming provision in s 1(3) of the Admiralty Jurisdiction Regulation Act and provides guidance on the evidentiary burden in disputes about the existence of maritime contracts.